JSW Steel Ltd, flagship Company of JSW Group (“JSW”) and Duferco International Trading Holding S.A. (“DITH”) have again aligned their strategic goals in a landmark USD 700 million 5-year Advance Payment and Supply Agreement (“APSA”) executed on the 27th February 2019.
This unique financing structure provides JSW long term funding to complement its plans for future growth secured by committed exports of steel products to DITH. For DITH the transaction assures a captive supply of various steel products from JSW over the term of the APSA.
The transaction further cements the long-term relationship between the two groups which have partnered together in various commercial ventures during the past 15 years. The deal is the largest trade finance facility to have been arranged in the Indian steel sector. In the past, JSW and DITH have entered into similar trade financing arrangements on smaller scale but for a longer term, all of which were successfully executed and completed.
The deal has been arranged and financed by the global banks BNP Paribas, Citibank, Credit Suisse, ING, Mashreqbank, Natixis, Societe Generale, Standard Chartered Bank acting as Mandated Lead Arrangers and Bookrunners. The commitment of the financing partners reflects the strong confidence held in both JSW and DITH when taking into consideration a transaction of this size and terms.
The structured long-term trade finance transaction is an important deal in diversifying the sources of financing for JSW Steel. This not only enables JSW to raise funds at competitive rates but also assures incremental volume of sales in export markets leveraging the wide spread global network of the DITH Group Companies. This transaction is a win-win for both the organisations.Mr. Seshagiri Rao, JMD and Group CFO
We are delighted to have concluded such a significant structured trade finance transaction; this corroborates our faith in the sustainability of steel trading and indeed is a material statement of confidence in the reliability of our partner JSW. We look forward to facilitating JSW’s existing and future steel exports to a diverse and multinational customer base.Mr. Matthew De Morgan, DITH Group CEO
JSW Steel Ltd. is the flagship company of the diversified USD13 billion JSW Group which has a leading presence in sectors such as steel, energy, infrastructure, cement and sports among others. From a single manufacturing unit in the early 1980s, JSW Steel Ltd, today, is one of the foremost integrated steel companies in India with an installed capacity of 18 MTPA and has plans to scale up in India and overseas. JSW Steel’s manufacturing facility at Vijayanagar, Karnataka is the largest single location steel-producing facility in India with a capacity of 12 MTPA.
The Company has been at the forefront of state-of-the-art, cutting-edge technology, research and innovation while laying the foundation for long-term growth. Strategic collaboration with global technology leaders to offer high-value special steel products for various applications across construction, automobile, appliances and other sectors. JSW Steel Ltd. has been widely recognised for its business and operational excellence. Key awards include the Deming Prize for Total Quality Management at Vijayanagar (2018) and the DJSI Robeco SAM Sustainability Industry Mover Award (2018) among others.
The DITH Group is the world’s leading independent trader and a prominent distributor and processor of Steel Products and associated raw materials. It has a world-wide network of offices and processing sites enjoying a physical presence in 82 countries across five continents. DITH’s wealth of experience in the international steel supply chain is world renowned and boasts a global footprint serving over 49,000 customers in 108 countries achieving a turnover of over USD7 billion with sales approaching 12 million tons per annum. Duferco SA is a subsidiary and the principal operating company within a group controlled by Duferco International Trading Holding SA.